An artist's rendering looking north on Highland shows the Highland Row project.

NASHVILLE — Long-delayed plans for a retail and student housing complex on Highland near the University of Memphis are on hold again after the state attorney general said the university lacks legal authority to enter an agreement with the project's private developer.

Tennessee Attorney General Robert E. Cooper said in an advisory opinion released Thursday that neither the U of M nor the Tennessee Board of Regents is empowered by state law to enter into a "student housing affiliation agreement" with the developer that would have put the University of Memphis's name on the privately owned and operated apartment building for students, faculty and staff.

The attorney general's opinion publicly revealed that the agreement required the university to contractually commit "that it will not construct additional student housing unless an independent consultant concludes" that it "will not have a materially adverse effect on the facility," including its proposed financing.

The "Highland Row" project would be built on vacant property on the west side of Highland between Midland and the Junior League of Memphis's property at Central and Highland. It was originally proposed in 2008 by Memphis-based Poag & McEwen Lifestyle Centers as a $65 million multiuse facility, including a 40,000-square-foot full-service Barnes & Noble Bookstore, but financing never materialized as the recession deepened.

In July of this year, U of M asked the State Building Commission to fast-track approval of a proposed agreement with Alabama-based Collegiate Housing Foundation, a nonprofit that would resurrect the project by working with for-profit developers to finance, build, furnish, equip and operate the development. As envisioned, the retail portion would be privately financed and the student housing would be financed with tax-exempt bonds.

The agreement called for the U of M's brand to be affixed to the complex as "affiliated student housing," although the university would have no role in leasing or managing the 200-plus apartments, which would be handled by a management company. Officials said at the time that they hoped construction could start this fall

But Building Commission members deferred action until questions about the university's and the state's obligations could be answered. U of M officials later asked whether they even needed the commission's approval, since no state funds were involved and the state would not own the property.

Board of Regents Chancellor John Morgan asked for the attorney general's opinion, which also concluded that even if the agreement were legal, it would still have to be approved by the Building Commission.

U of M Vice President for Business and Finance David Zettergren said Thursday he's disappointed. "We'll have to regroup and see where we want to go from here. . . . Hopefully the developers can come up with a backup plan."

David Gregory, vice chancellor of the Board of Regents, said he has no plans to ask the state legislature to pass a bill authorizing such agreements but will discuss the matter with U of M officials.

Zettergren said university officials thought of Highland Row as the kind of development state officials want.

"The discouraging thing from our perspective is this was a win-win. There's no risk to the university; we're not responsible for debt, for operation, for leasing. We would just have our name on it. It would promote economic development. It would have a university and community bookstore, which would generate more revenue.

"I don't know what the state thinks the risk is to the university or the state. So I don't know why they would be opposed to it."